Car Buyer Labs

Car Buying Advice, Tips, and Reviews

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Is a Used Vehicle Warranty Right for You?

Vehicle warranties are big business. Many people look to buy new and Certified Pre-Owned vehicles specifically because of warranties. They come with a lot of benefits and guarantee you a certain level of confidence in your purchase. Extended warranties are especially useful when you’re buying a used vehicle or even a Certified Pre-Owned vehicle because they give you an extra level of protection, whether you’re searching through used car listings, opting to shop for a used truck, or if you’re browsing through used SUVs for sale near where you live. Whether the vehicle is new or used, warranties can be an extremely important way to protect your investment.

New vehicles almost always come standard with manufacturer-backed warranties and the option to extend that warranty with added protection packages. But for used vehicles, you sometimes have to request or go out of your way to acquire extended warranties. Why is that? Is that a good thing? Are extended warranties right for you? Are they a pitfall? What are the pros and cons? Well, it’s time to answer those questions right here so that when you decide to buy your next used vehicle, and you’re debating whether an extended warranty is worth it, you can keep this information in your back pocket to help you make the right decision.

What Is a Car Warranty?

Before getting into the benefits, pros, and cons of a used car extended warranty, it’s important to understand what a car warranty is and what it does. Basically, when you buy a vehicle, there is a warranty offered by the manufacturer, or sometimes the dealer, to provide you with maintenance and repair coverage for select components, parts, or systems of the vehicle. This often takes the form of powertrain or bumper-to-bumper warranties that can range between 5,000 and 100,000 miles or anywhere between three months to sometimes seven years. The warranty will cover costs for repairs that fit the stipulation of the warranty, enabling you to save a lot of money when it’s time to either repair or replace vital components within the coverage range.

What Is an Extended Warranty?

An extended warranty for your vehicle is usually available from the auto manufacturer, the dealership, or third-party companies offering bespoke warranty packages depending on the vehicle you own. With third-party companies, the extended warranty coverage can include both new and used vehicles, and depending on the company, it will depend on the kind of coverage that suits your finances and your vehicle. Extended warranty coverage can also extend to components or systems that aren’t always covered in standard warranty policies, so you have the option of added protection for your vehicle, which can extend beyond the limitations, time-frames, or mileage ceilings of a standard warranty, but for an extra cost.

A person is shown receiving a key fob for one of many used SUVs for sale.

What Are the Benefits of an Extended Warranty for a Used Vehicle?

Different companies and some auto manufacturers offer extended warranties for various vehicles, the most notable being the extended coverage options from GM, Ford, Toyota, Kia, Nissan, and Honda, just to name a few. Different companies offer different coverage plans ranging from various makes, models, trims, and conditions, typically offered through yearly or multi-year contracts. The benefit of the extended warranty on a used vehicle is that you get access to plans where you pay to reduce or nullify the cost of repairs in case anything happens under the warranty coverage terms.

If you buy a used vehicle that may be known for having trouble with its powertrain or drivetrain after a certain number of miles, extended warranty coverage is the perfect solution for dealing with that issue since the coverage would handle any repairs or replacements that would occur within the coverage limits. If you do a lot of commuting or hard driving and put lots of wear and tear on your vehicle, such as a used commuter SUV, then having extended warranty coverage is the perfect solution. Most coverage plans will include electrical systems, mechanical systems, drivetrain components, powertrain components, or a general plan that spans bumper-to-bumper coverage.

If anything happens during the extended warranty period, your vehicle is eligible to be repaired without any additional costs to you. The plan covers the costs of repairs and gives you peace of mind when it comes to getting your vehicle serviced by quality mechanics so you can get back onto the road. Some companies also provide specialty coverage for alternative fuel vehicles, roadside assistance, pumps, hoses, and more complex electrical systems.

The good part about extended warranty coverage is that you can find multiple companies – including the dealer where you bought your used vehicle – that provide coverage tailored specifically to what you want and the kind of vehicle you drive. Some coverage plans are also transferable, which is excellent if you plan on swapping your used vehicle for something else or if you’re buying a used vehicle that already has extended coverage and want to take advantage of that coverage.

What Are the Downsides to Extended Warranty Coverage for a Used Vehicle?

Before jumping for joy at the prospect of getting extended warranty coverage, it’s probably also important to recognize that not all extended warranty coverage for a used vehicle is equal. Some plans offer some features that you won’t find from other companies or dealers with other plans. Now, a safe bet is just to get comprehensive extended warranty coverage from the original manufacturer, but the downside is that they often have model and mileage restrictions on what the extended warranty can cover. For example, HondaCare only covers a vehicle that is three model years old or newer.

In other cases, extended warranty coverage only applies to vehicles that fit strict conditions. In some cases, a vehicle must be 20 years or newer or have fewer than 100,000 miles before you can get extended warranty coverage on it, which may prove a bit of a hassle for people who buy an older used car but want the extended coverage. There’s also the issue that some coverage plans can lock you into lengthy contracts with high fees, depending on the plan and who offers it. Usually, monthly payments are attached to multi-year contracts, which may not be enticing for some drivers who simply want to pay upfront or pay a yearly fee for extended coverage.

Another drawback is that most plans don’t cover consumable items. So, if you constantly need new tires, batteries, or filters replaced (depending on the coverage plan and who provides it), you may find yourself a bit out of luck. Some plans also have deductibles you have to pay before the extended warranty covers service. You also have to consider that some companies will limit where you can get your vehicle serviced – usually, OEM coverage plans limit you to their dealerships, while third-party warranty companies may limit you to certain service centers.

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What Kind of Extended Warranty Coverage Is Right for You?

There are many ins and outs to extended warranty coverage, and it all depends on what kind of coverage you want for your vehicle. If you’re looking for extended warranty coverage on a vehicle you purchased with transferable coverage, it wouldn’t hurt to get the extended coverage while the vehicle is still under warranty. This is common if you buy a used vehicle that’s still within the coverage range of a new car warranty from the auto manufacturer. The upside is that you get extended coverage on an already covered vehicle, and it reduces any worries about repair or service costs while you own the vehicle, assuming you plan to drive it for more than seven years or more than 100,000 miles.

Extended coverage on a Certified Pre-Owned vehicle is another thing worth considering if you’re opting to buy a Certified Pre-Owned vehicle. While these vehicles typically already have thousands of miles on them and already come with limited warranty coverage, extended coverage on a certified vehicle is another safe bet if you don’t want to run the risk of dealing with the aftermath of potential engine or transmission failure, especially if you’re doing a lot of long commutes, trailering, towing, or putting lots of miles on the vehicle.

If you’re driving your car, truck, or SUV in a highly populated area known for frequent accidents, opting for an extended coverage plan that includes collision, tire, and roadside assistance support is important, as getting into a collision and having the warranty cover the costs is super helpful. Again, it depends on where you buy the used vehicle, what used coverage plans are available, and whether you can leverage that from a dealer or OEM extended warranty policy.

Should You Get Extended Warranty Coverage for Your Used Vehicle?

Whether or not you should get an extended warranty on your used vehicle depends on what you’re driving, how often you’re driving it, and your expected expenditures for repair and service costs over the lifetime of ownership. If you’re planning on driving the car to the bone, doing a lot of commuting, and expecting to put thousands of miles on it, extended warranty coverage for a used vehicle seems like a no-brainer. If you opt for a Certified Pre-Owned vehicle and don’t plan on keeping it for long, getting an additional extended warranty on it doesn’t make the most sense, especially if you’re going to keep it for less than five years.

However, if you opt for a Certified Pre-Owned vehicle and plan on driving it beyond the basic CPO warranty coverage, an extended warranty might benefit you if you don’t plan on doing all of the maintenance, repairs, or replacements yourself. You will still need to keep the vehicle regularly serviced at regular service intervals, but having the extended coverage can provide you with peace of mind if your vehicle is already up there in age and has many miles on it; the extra protection can save you a lot of heart-ache in case anything happens. So those are some important things to consider if you’re considering extended warranty coverage on a used vehicle.